Executive Summary
- What’s new: The UK tax authority will require registration for UK investment managers and certain other financial institutions under the UK’s Common Reporting Standard (CRS) regime.
- Why it matters: UK investment managers must now register with HM Revenue and Customs (HMRC) as a reporting financial institution, even if they do not have any information to report, or risk penalties for noncompliance.
- What to do next: UK investment managers should register with HMRC by 31 December 2025 and consider reviewing internal procedures.
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What Has Changed and When
- Updated regulation: On 25 June 2025, HMRC issued the International Tax Compliance (Amendment) Regulations 2025 (the 2025 Regulations) amending the existing International Tax Compliance Regulations 2015, introducing significant changes to the UK’s Common Reporting Standard (CRS) regime.
- 2026 effective date: The 2025 Regulations apply the updates to the CRS published by the Organisation for Economic Co-operation and Development (OECD) in 2023, and introduce a new mandatory registration requirement for UK investment managers and certain other financial institutions, effective from 1 January 2026.
- Under the previous regulations, FCA-authorised fund managers and investment managers (“UK investment managers”), while falling within the definition of reporting financial institutions, were not required to register if they had no information to report on an annual Automatic Exchange of Information (AEOI) return. Because investment managers typically do not maintain any reportable financial accounts for CRS purposes (accounts are kept at the fund level rather than the manager level), managers do not normally have any information to report.
- Under the 2025 Regulations, UK investment managers must now register with HMRC. The 2025 Regulations do not add any additional reporting obligations for managers, and UK investment managers will not be required to submit an AEOI return if they do not have information to report.
- The penalty framework has also been reformed, broadening the scope of conduct that may trigger penalties, including failure to register. Regulators can also impose penalties for inadequate due diligence, record-keeping failures, late or inaccurate returns, and failure to provide adequate information upon request from HMRC.
How Investment Managers Can Respond
- UK investment managers must register with HMRC for the AEOI as a reporting financial institution by 31 December 2025, even if they do not have any information to report.
- Registration can be completed online through this portal.
- There are no new reporting obligations for managers who do not have any information to report; the requirement is solely to register.
- Investment firms can review their internal procedures, controls and policies to ensure compliance with the new requirements and to mitigate the risk of penalties under the updated regime.
Other Potential Actions
- We understand that HMRC is contacting UK managers to enquire about historic compliance; in particular, managers have been asked why they had not previously registered for CRS purposes. If you receive a query or contact from HMRC regarding your compliance status, you may wish to seek legal or tax advice.
- The scope of the 2025 Regulations means that UK entities (within a group) that are not investment managers may be required to register. UK investment management businesses should consider assessing whether certain entities qualify as reporting financial institutions or specified nonreporting financial institutions.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.